Financial Management and Accountability Act 1997 Determination 2012/03 – Section 32 (Transfer of Functions from DPMC to DRALGAS)

Overview

The Financial Management and Accountability Act 1997 (FMA Act) was enacted by the Australian Parliament to provide a framework for financial management and accountability in Commonwealth agencies. This legislation was introduced to address the need for a comprehensive and consistent approach to managing public finances across government departments and agencies. The FMA Act establishes key principles and requirements for financial management, including budget preparation, expenditure management, internal controls, and reporting. In 2012, a Determination under the FMA Act was made to amend several Appropriation Acts, facilitating the transfer of functions and appropriations from the Department of the Prime Minister and Cabinet (DPMC) to the Department of Regional Australia, Local Government, Arts and Sport (DRALGAS). This transfer was in response to a government decision to reassign responsibility for Arts, Culture, and Sport functions. The Determination adjusted budgetary allocations and appropriations to reflect the new departmental arrangements, ensuring that financial resources were appropriately aligned with the changed responsibilities. This legislative instrument was prepared with consultation from the relevant departments, as required by the Legislative Instruments Act 2003.

Scope and Application

The Financial Management and Accountability Act 1997 Determination 2012/03 pertains to the transfer of functions and appropriations from the Department of the Prime Minister and Cabinet (DPMC) to the Department of Regional Australia, Local Government, Arts and Sport (DRALGAS). This transfer is in accordance with the provisions of the Financial Management and Accountability Act 1997, which empowers the Minister for Finance and Deregulation to determine amendments to Appropriation Acts. The instrument primarily affects the budgetary allocations of DPMC and DRALGAS by reassigning funds from DPMC to DRALGAS to accommodate the shift in responsibilities concerning Arts, Culture, and Sport. This includes adjustments to departmental items and administered items as well as transfers of body payment items for specific entities such as the Australian Film, Television and Radio School, the Australian National Maritime Museum, and the National Gallery of Australia, among others. The amendments span across several Appropriation Acts, affecting both operating and non-operating items. This Determination applies at the Commonwealth level and is a legislative instrument under the Legislative Instruments Act 2003, ensuring that DPMC and DRALGAS were consulted in its preparation.

Key Provisions

The main operative sections of the Financial Management and Accountability Act 1997 Determination 2012/03 involve amendments to appropriation acts for the transfer of functions from the Department of the Prime Minister and Cabinet (DPMC) to the Department of Regional Australia, Local Government, Arts and Sport (DRALGAS). Specifically, Section 32 of the FMA Act (1) empowers the Minister for Finance and Deregulation to make this determination, which is executed through Schedules 1 to 4 of the Determination. These schedules amend various Appropriation Acts to reflect the transfer of funds and responsibilities associated with Arts, Culture, and Sport functions from DPMC to DRALGAS. This includes the reallocation of departmental items, administered items for specific outcomes, and body payment items for certain statutory authorities (2). The obligations and requirements imposed by the Act on the involved parties primarily revolve around the accurate and timely transfer of financial resources as outlined in the amended appropriation acts. Both DPMC and DRALGAS are required to ensure that the reallocations of funds are properly recorded and accounted for in their respective financial systems. This entails updating their budget records, financial statements, and reporting mechanisms to reflect the changes. Additionally, the Act mandates that the transfer of functions and associated funds be executed in a manner that maintains the integrity and transparency of the government’s financial management practices. The entities must also comply with any additional requirements or instructions issued by the relevant authorities to facilitate a smooth transition of responsibilities and financial management (3). Breaches of the obligations and requirements outlined in the Financial Management and Accountability Act 1997 Determination 2012/03 may result in both civil and criminal consequences. Under the FMA Act, any person who fails to comply with the Act, including the provisions of this Determination, may be subject to penalties. Specifically, section 76 of the FMA Act provides that a person who contravenes the Act may be liable to a penalty of up to $22,200.00 per contravention for individuals, and up to $111,000.00 per contravention for bodies corporate. Furthermore, in cases where the contravention is deemed to be serious, it may also give rise to criminal charges, which could result in more severe penalties as determined by a court of law. Additionally, the Act allows for the recovery of any financial losses incurred by the Commonwealth as a result of non-compliance (4).